Jeff Kempker, CEBS, CRC
LAGERS understands that the benefits we offer help tens of thousands of Missourians gain financial independence. We take our responsibility as caretakers of your money very seriously. LAGERS’ Board of Trustees and staff are considered fiduciaries. This means we are legally obligated to act and make decisions that are in the best interest of our members and their beneficiaries. There are many specific things we do on a daily basis to help protect your money. Here are a few.
1. Investing Prudently
Nearly every dime LAGERS receives from participating members and employers is invested in the markets. Returns from these investments are a key source of funding. In fact, around 65% of your retirement benefit is paid for with investment returns. LAGERS’ uses the “prudent person rule” when investing your money. This means that we invest in order to receive reasonable income and preserve assets in the same way a prudent person would do with her own money. In other words, LAGERS maintains a long-term focus and doesn’t make knee jerk reactions to fluctuations in the markets.
2. Pre-Funding of Benefits
There are a couple ways you can pay for a future retirement benefit: the pay-as-you-go method or the pre-funding method. The pay-as-you-go model is used by Social Security. We all know how that is going. LAGERS uses the pre-funding model where contributions for your benefit begin the day you are hired and continue throughout your career. This helps to pay for your benefit before you retire so that future generations aren’t stuck with the bill while you’re lounging on the beach.
3. Checks and Balances
LAGERS has several regular audits to ensure we are being good stewards of your money. First, we have an internal auditor/compliance officer whose job is to make sure LAGERS is in compliance with state and federal regulations, staff is following internal policies and procedures, and we are upholding our responsibilities as fiduciaries for you. LAGERS goes through an external financial audit each year as well as an audit of our internal controls over member and employer data. The Missouri state auditor also has the authority to audit LAGERS at any time (the last MO State Audit of LAGERS was in 2015). Audits can be viewed as a hassle, but LAGERS views them as a vital tool in protecting your money!
4. Elected Board of Trustees
LAGERS is governed by a seven member board of trustees whose role is to ensure that LAGERS is appropriately managed to serve in the best interest of our members and their beneficiaries. Six of these trustees are elected by members at LAGERS’ annual meeting and one is appointed by Missouri’s governor. Three of the trustees are members of the system, just like you, and the other three are representatives of local government employers that participate in LAGERS. Having trustees that are elected by our members ensures that you can have a say in how your pension plan operates.
5. Protecting Your Data
LAGERS goes to great lengths to protect your personal information. Our pro-active information technology team constantly monitors cyber threats and stays up-to-date on the latest tactics used by hackers. One of LAGERS’ staff has even completed “hacker training” so we can better understand how cyber criminals think and act. Each year LAGERS hires an outside agency to test our defenses by attempting to hack into our systems and we consistently receive the highest score possible. LAGERS’ staff also receives social engineering training at least once a year to help us recognize when scammers are trying to gain access to your personal data. We also have a detailed disaster recovery plan that we practice every year to ensure your data remains safe in the event of a disaster that interferes with LAGERS’ daily business. We even have backup servers in a cave in southwest Missouri just in case our internal servers go down!
6. Advocating Proactively
LAGERS proactively advocates for the protection of pensions for Missouri’s local government workers. There are some outside interests that lobby legislators to do away with pensions for government workers altogether. This would be a mistake. We understand the importance of pension benefits for you, your employer, and the state of Missouri and we will do everything we can to ensure LAGERS remains strong for decades to come. LAGERS’ staff meets with state and federal legislators at least once a year to communicate why LAGERS is a good investment for Missouri. We also host an annual legislative advocacy day where we take members like you to the Missouri capital so you can talk face to face with your representative and/or senator about what your LAGERS benefit means to you.
LAGERS’ trustees and staff strive to be good stewards of your money every day. We are watching closely over the trust fund and worrying about its protection so you don’t have to. You can have peace of mind knowing that your future benefit is safe with us!
